Sales tax on imported milk powder arose when appropriation and delivery occurred after customs clearance within the State.

Sales of stock held at Madras through the assessee's agent were treated as sales within Madras, making the assessee the dealer for those turnovers. For the imported milk powder, the goods formed part of an unascertained mass, delivery orders were issued after contract, and title did not pass through shipping documents; appropriation to each buyer occurred only on delivery after customs clearance. As the goods were not specific goods under the Sale of Goods Act, the contract did not take the sale outside the State merely because it preceded delivery. The transaction was completed only after import was over and within the State, so both items were taxable.

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Issues: Whether the disputed turnovers were liable to sales tax, and whether the imported milk powder sales became complete only after the goods crossed the customs frontier and were appropriated on delivery, so as to amount to sales within the State.

Analysis: The second item represented sales effected from stock held at Madras through the assessee's agent, and the sale took place at Madras, making the assessee the dealer in relation to those sales. As to the first item, the goods were part of an unascertained mass of imported milk powder. Delivery orders were issued after the contract, but the sale did not involve transfer of title by shipping documents. The goods were cleared by the assessee's clearing agent, and appropriation to each buyer occurred only at the point of delivery after customs clearance. Since the goods were not specific goods within the meaning of the Sale of Goods Act, the transaction did not fall outside the State merely because the contract preceded delivery. The sale was completed only after import was over and within the State.

Conclusion: Both items were rightly held taxable, and the assessee's challenge failed.

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